By Quentin FottrellAndrew KeshnerZoe Han
Ask these 5 timely financial questions instead
Don’t get mad at Thanksgiving dinner. Get tips on how to navigate inflation.
The midterms are over, so perhaps it’s time to shelve political talk — especially if your dinner table is composed of family members from opposite sides of the political aisle. Democrats have held onto the Senate, while Republicans have regained control of the House by a narrow margin. And Nancy Pelosi, a Democrat, said Thursday she would step down as Speaker of the House after two decades.
After politics, the second topic to avoid: what happens after mom and dad pass away. Don’t go there. It would certainly be a good idea to avoid talk of inheritance — that might be one way to guarantee a bust-up over the mashed potatoes and gravy, especially if your siblings have an acrimonious history. If in doubt, write to The Moneyist advice column, and/or quietly contact a trusts and estate lawyer.
Now that politics and inheritance are off the table, put a stop to complaining about high prices and the low stock market. Sure, inflation hit 7.7% in October, food prices were up 10.9% year over year, the Federal Reserve hiked interest rates six times this year, and the 30-year mortgage rate hovers at 7%. But no one wants to hear you bleat on about how your 401(k) has slumped. Join the club.
So what meaningful actions can you take that would help your fortunes? Is it time to cut down on splurging on new TVs this holiday season? In what could be described as a Black Friday surprise: Amazon (AMZN) founder Jeff Bezos told people not to buy cars, refrigerators and other big-ticket items this holiday season. Critics on social media, unsurprisingly, called him out, and suggested people also avoid Amazon too.
You may wish to cut down on gift giving and, instead, have fun with a Kris Kindle where adult family members pick names out of a hat, and buy only one present. A record-breaking 166.3 million people are planning to shop in person and online between Black Friday and Cyber Monday, according to the National Retail Federation. That’s nearly 8 million more people than last year’s projections.
Evan Potash, a senior wealth management adviser at the insurance company TIAA, says this could be a good time to iron out a few investing decisions.: “Asking parents what they want done with their money in the future, and making sure that a solid estate plan is documented, [including] the suggested payout timeline for future inherited annuities, and the benefits of annuity payouts over collecting a lump-sum.”
That sounds like good and well-meaning advice, but maybe wait until after people have digested their food before wading into retirement-planning territory. For those who want to brush up on their finances during Thanksgiving dinner, take the MarketWatch Financial Literacy Quiz. Last but not least, you could do worse than to discuss these five timely questions over the turkey:
-Quentin Fottrell and Andrew Keshner
This turkey is delicious. How can I save money on my food bill?
Expect this year’s Thanksgiving dinner to be 20% more expensive than last year as most ingredients — everything from pumpkin-pie mix and whipping cream to frozen peas and frozen pie crusts — have seen a spike in prices. You might also see fewer side dishes on the table as some cash-strapped hosts cut costs to save money. Consider buying generic brands, cut down on eating in restaurants and buying nonessential items, and shop at cheaper supermarkets.
Most families could use some neat tricks to inflation-proof their meals. While a majority of Americans look for deals and buy in bulk to cut costs, others are getting more creative, switching to vegetarian “meatloaf” instead of turkey. Take a page out of this Harrisburg, Pa., mother-daughter duo’s book and experiment with recipes under $5. In fact, their discount cooking sessions turned into a regular event that the family videotaped for posterity.
Skip the cranberry sauce. Given the fall in stocks, should I also buy the dips?
Older family members who are closer to retirement may be groaning — with some justification — about their 401(k). After all, younger family members have longer before they retire, and can afford to weather the peaks and valleys of the stock market, which has yielded depressing returns thus far in 2022. The Dow Jones Industrial Index is down 7.4% so far this year, while the Nasdaq is off 25.4% and the S&P 500 has fallen by 15.6%. So far, so depressing.
As millions of Americans count their losses over their investments in cryptocurrencies — including those burned by the bankruptcy of the cryptocurrency exchange FTX — some risk-taking family members might be tempted to time the stock market. Take a lesson from Nick Maggiulli, the author of the blog “Of Dollars and Data.” He says, “Buying the dip can’t beat dollar-cost averaging, even if you were God.” And he gives you these charts to prove it
My cupboard is bare due to rising prices. How can I boost my savings?
The personal saving rate — personal saving as a percentage of disposable income, or the share of income left after paying taxes and spending money — fell to 3.3% in the third quarter from 3.4% in the prior quarter, the government said last month . Some immediate changes to boost your own cashflow: Automate your drafts from checking accounts into high-interest savings accounts, and think about a good 401(k) plan with a company match, plus low-cost investment options and low fees.
Cut down on your monthly recurring expenses. Do you need Netflix (NFLX), Paramount+ (PARA), Peacock (CMCSA), HBO Max (WBD), TCM, Criterion, Disney+ (DIS) and all the rest? Or could you do without a few of them for a while? Prioritize paying off high-interest debt; keep track of spending; and if you need help paying off debts, look to a nonprofit organization like the National Foundation for Credit Counseling over for-profit debt-settlement companies.
Your home office looks comfortable. How often should I go into the office?
The return-to-office debate continues, and it’s bound to cause some lively discussion at Thanksgiving dinner. Tesla founder (TSLA) Elon Musk recently told Twitter staff to physically get back to work, or consider their “resignation accepted.” Employer demands might not be so stark elsewhere, but questions still swirl on productivity, worker-boss relations and job security as they pertain to remote work, the five-day-per-week in-person job or a hybrid mix.
Of course, be sensitive to others who may not have the luxury of a hybrid schedule. It’s a debate largely pegged to white-collar work. An estimated 92 million people can work remotely for at least part of their jobs, according to McKinsey & Co. But these researchers estimate there are also 66 million workers who can’t show up for work remotely. So be sure to ask relative with strictly in-person jobs how they are dealing with gas prices and commutes.
I’ve lost my appetite due to stress. Is this a good time to look for another job?
Whatever your industry, it may become harder to avoid being given your marching orders due to a slowing economy or, worse, a recession in 2023. If you have job security, think twice about moving because of a situation at work that you can live with or know will pass. True, workers often jump ship as a way to bump up their salary. But tech companies — from Twitter to Meta (META) — have laid off thousands of staff in recent weeks. It could be a sign of what may come.
Given the economic outlook, workers may have limited options, Anuj Nayar, LendingClub’s financial health officer, warned last month. “With inflationary pressures not expected to subsidize anytime soon, living paycheck-to-paycheck has become the norm,” Nayar said. “Many are pessimistic about their odds of increasing their paycheck by switching jobs, and some households will become more vulnerable to swings in labor-market conditions.”
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